UK culture secretary Nicky Morgan has moved into the spotlight after backing the government's decision to offer funds to US tech entrepreneur Jennifer Arcuri, following a move to pause investigations into the matter.
Payments made to Hacker House were subject to an internal government review, which was put on hold, Ms Morgan said, adding that it was not unusual for the UK government to offer money to companies without an income, as well as approaching them to apply for government grants.
The London Assembly paused the inquiry into the Arcuri scandal following requests from the Independent Office for Police Conduct (IOPC).
— London Assembly (@LondonAssembly) October 16, 2019
Ms Arcuri, a close acquaintance to the British Prime Minister whilst he was the London Mayor, accompanied him during several overseas trade missions despite not meeting the requirements, and has denied having an affair with Mr Johnson.
But the Government gave her enterprise, Hacker House, a £100,000 grant last year to help the startup develop its cybersecurity technologies, waiving requirements that grants may not surpass half the firm's yearly income.
"Often start-up companies don't," Ms Morgan said when asked about the grant. "We all have constituents and others who have set up incorporated companies on an absolute shoe-string and have very little or almost no income in the first year."
She added: "Obviously I wasn't a minister at the time...but it wouldn't surprise me because we listen to what people are saying in terms of the development of funding for a whole host of different parts of the department.
Ms Morgan added that there was "undoubtedly" a need to train more personnel in cybersecurity and that the funds were "particularly about increasing diversity of those engaged in that sector", namely by "actually looking for organisations who are doing valuable work in that area who we can support".
Speaking on whether the government grant had referenced Mr Johnson, Morgan said: "I don't believe that there are any - I doubt very much there is anything referencing [him] but I haven't seen the form. I doubt very much there is any reference to the prime minister."
The government investigation is set to be published by the end of October, according to the culture secretary.
The London Assembly, the watchdog tasked with scrutinising connections between the Prime Minister and Ms Arcuri, paused the inquiry after GLA Oversight Committee chair, Len Duvall made the announcement that the IOPC would intervene.
Mr Duvall said in a statement on Wednesday: “The London Assembly respects the IOPC’s remit and will not in any way interfere with its important work. However, the Assembly also has an important role and special powers. We will consider using those powers immediately following the conclusion of the IOPC’s work.
“Subject to that important review by the IOPC, certain people should be on notice that the Assembly may well be knocking on their door sometime soon.”
An inquiry from London mayor Sadiq Khan, which aimed to investigate the £11,500 given to Ms Arcuri for her overseas trade missions with Mr Johnson, was also halted under a similar IOPC request.
A London Mayor spokesperson said: “The Mayor’s office has agreed with Kathryn Robinson that she will look into the processes currently in place at London & Partners and the Greater London Authority’s involvement in them, to see if they need to be strengthened. This review will begin shortly, irrespective of the IOPC’s work.
“The IOPC has informed GLA officers that they are concerned that unless the review is limited to current processes, there is a risk it could prejudice the work they are undertaking. Following completion of the IOPC’s processes, the review by Kathryn Robinson and the GLA oversight committee’s investigation, the mayor will consider whether any further steps are required.”
News of the scandal over Boris Johnson's misuse of funds broke in late September following an article from the New York Times, which accused the pair of having an extramarital affair and citing information from two acquaintances of Ms Arcuri. Both the Prime Minister and Ms Arcuri have repeatedly denied having any intimate relationship as well as embezzling public funds due to trade missions or funding her startup.